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It won by a hair. On 3 April at 11 pm, South Korea officially became the first country to launch its 5G network – the new generation of mobile telephony. South Korea beat the United States by only a few hours, winning the symbolic title of the global pioneer in the industry. Of course, this victory in the final sprint is above all a marketing win for South Korea, which is reinforcing its image as a small country at the cutting edge of technology. But it also illustrates the importance for countries all over the world of ensuring they don’t lag behind in the race for 5G.

“The new generation of mobile telephony is a technological leap forwards compared to 4G. It will certainly be an essential competitive factor for companies,” says Philippe Horisberger, deputy director of the Swiss Federal Office of Communications (OFCOM). “Countries that are behind in building their network could fall behind economically in the future. The divide between latecomers and pioneers will be difficult to overcome.”

In the 5G race, Asia and Uncle Sam are in the lead, with networks already operational in South Korea, China and the United States, in particular. In other words, “Europe is lagging behind,” says Julien Leegenhoek, a tech stock analyst at Union Bancaire Privée (UBP). “If things don’t change, European countries may not be the first to develop the most modern, tech-savvy applications.”

Dubbed “wireless fibre”, 5G promises to revolutionise mobile internet by offering never-before-seen services thanks to its ultra-fast speed. For example, it will be possible to download a high-definition film to a smartphone in just a few seconds, at speeds of up to 10 Gbit/second (compared to 1 Gbit/second for the most advanced 4G network). Experts are already envisioning new immersive experiences in augmented or virtual reality in areas such as sports broadcasts, news and gaming.

However, in the immediate future, the general public isn’t the main target audience, as Sylvain Chevallier, a telecoms partner at consultancy firm BearingPoint, explains: “5G will certainly be faster, which is obviously a positive for consumers in terms of usability. But consumers won’t experience a major technological shift, even though download speeds are twice as fast. For industry, however, 5G is a real revolution.”

“All industries will likely be impacted by the arrival of 5G”

Philippe Horisberger, deputy director of OFCOM

The Internet of Things (IoT), which has been a hot topic for years, will be able to finally take shape. Thanks to its “slicing” architecture, the new generation of mobile telephony will be able to handle millions of connections simultaneously in situations in which 4G, which was only sized for a few objects, becomes saturated. “5G will support the development of the Internet of Things by allowing a very large number of devices to be connected simultaneously,” says Chevallier. “This will lead to a wide range of new services.”

This is due in particular to 5G’s very short latency – or network response time – of about one millisecond, which is 10 times less than that of 4G. “This performance boost opens the door to developing resource-heavy applications, such as autonomous vehicles and telemedicine,” says Chevallier. “If you’re in an autonomous vehicle, you’d rather have it react instantaneously than have to wait for the response time, even if it’s just a few dozen milliseconds.”

TOWARDS SMART FACTORIES

“All industries will likely be impacted by the arrival of 5G,” says Horisberger, deputy director of OFCOM. “Manufacturing processes in industry, for example, will be transformed. In the future, robots will all be connected and able to be directed in real time, with their artificial intelligence hosted in the cloud, giving factories more flexibility.”

For industry, 5G is the essential fuel required to digitalise the entire economy. And the financial possibilities are equal to the challenging task at hand. According to a study from consultancy firm TMG published in December 2018, 5G mobile services could create $2,200 billion in value globally between 2020 and 2034, or 5.3% of global GDP during the same period. “The first companies to profit from this will be those that develop the ecosystem – i.e. telecoms suppliers such as Huawei, Nokia and Ericsson, as well as chip manufacturers such as Qualcomm,” says Thomas Coudry, a telecoms analyst for investment bank Bryan, Garnier & Co. “But in the medium term, it is user industries (the automotive sector, energy, the Internet of Things) that will benefit.”

In Switzerland, 5G will create up to 137,000 jobs by 2030, and will increase production by up to 42.4 billion Swiss francs, according to a February 2019 study by the Swiss Telecoms Association (ASUT), the industry’s main lobby group. The manufacturing industry will benefit the most, with a production increase of 10 billion francs, representing an additional 20,600 employees by 2030.

During a pilot programme which began in spring 2017 in partnership with Swisscom, Swiss company Ypsomed – a specialist in injection systems – automated a production line with 5G (read the interview on this page). According to results published in March 2018, this technology resulted in a productivity boost. “5G is a key factor in the fourth industrial revolution: artificial intelligence. Smart production can’t do without it,” says Simon Michel, CEO of Ypsomed.

“5G is a key factor in the fourth industrial revolution: artificial intelligence”

Simon Michel,CEO of Ypsomed

In this context, any delay in implementing 5G could end up being detrimental, depending on the economic environment. According to ASUT, delaying the development of the 5G network by three years would reduce growth from this technology by 10 billion Swiss francs and would make companies less competitive.

SWITZERLAND HITS THE BRAKES

Until now, Switzerland has been the European leader. In mid April, Sunrise and Swisscom launched their 5G network in nearly 150 locations, making Switzerland one of the world’s five 5G pioneers. But this is starting to change. Because of growing concern from the population, several cantons – Vaud, Geneva and Jura – have adopted moratoriums on the construction of new antennas, effectively freezing the spread of 5G. They are waiting to find out more about the technology’s health effects. “We’re at the head of the pack,” says Horisberger. “Now is not 5G the time to slow down if we want to stay in the race.”

Jean-Pierre Bienaimé, secretary general of the Brussels-based 5G Infrastructure Association (5G-IA), qualifies this concern: “5G will develop gradually. Europe will be significantly behind if it’s not ready by 2022, in other words, if it misses the boat for what I call the real 5G.”

The first 5G, currently available in a handful of countries, including Switzerland, is a “non-standalone” version using a network core that is still 4G. As a result: “It’s more of a 4G++ than a true 5G,” says Bienaimé.

In Switzerland, the 5G network will allow speeds up to two gigabits/second by late 2020, which is roughly double the speed of the best 4G. That’s enough to boost video playback on smartphones, but certainly not enough to revolutionise industry.

“We’re still a long way from being able to fully explore the potential of 5G,” says Coudry, a telecoms analyst for investment bank Bryan, Garnier & Co. “In the short term, the main benefit this technology brings to operators is absorbing the growth in data volume at a lower operating cost than that of 4G. Some are talking about halving the cost of a gigabyte. We won’t see new applications emerge until 2022–2023.”

COMPETING NETWORKS

But widespread adoption of this technology isn’t a sure bet just yet. There are alternative solutions: “The Internet of Things didn’t wait for 5G before developing,” says Julien Leegenhoek, analyst at UBP. “Operators have a real incentive to describe this new network as revolutionary and to promise a number of unprecedented applications. But there are competing networks, such as WiFi.”

While 5G advocates are already announcing the death of WiFi, some experts don’t believe this scenario will actually occur, especially because of 5G’s prohibitive implementation cost. 5G “At the end of the day, it’s likely that several standards, including 5G and WiFi, will share the connected objects market,” says Leegenhoek. The sixth generation of WiFi (802.11ax), which will start being rolled out in late 2019, will offer speeds of several gigabits and is designed for industrial applications.

“The Internet of Things didn’t wait for 5G before developing”

Julien Leegenhoek, analyst at UBP

For the time being, the Internet of Things will use competing tech- “The Internet of Things didn’t wait for 5G before developing” Julien Leegenhoek, analyst at UBP nologies such as Bluetooth, the LoRaWan protocol or WiFi, and it still remains to be seen if 5G will be able to vanquish them all. “In reality, no one knows which technology will be used for which purposes,” says Coudry of Bryan, Garnier & Co. “Nevertheless, it’s hard to say right now what future services will arise as a result of 5G technology.”

Philippe Horisberger of OFCOM agrees: “When 3G appeared in 2004, no one really knew what the technology could be used for. And then Apple launched its nowfamous apps and mobile internet became extremely successful. It will be the same for 5G. It will result in an explosion of new innovations and applications that we have no idea about yet.”

“5G GUARANTEES MORE STABLE SPEEDS THAN WIFI”

Urs Lehner, member of the Swisscom executive board and head of the “Enterprise Customers” division, explains the advantages of 5G for companies.

Last year, Swisscom began a pilot project for the industrial use of 5G with Bern-based company Ypsomed, which makes insulin pens for people with diabetes. The goals are digitalisation and real-time monitoring of goods throughout the production process. We take a closer look.

What are the concrete advantages of 5G for a company like Ypsomed?

First, 5G offers lots of flexibility and an easy installation. Compared to fibre optics, for example, 5G doesn’t require lots of work to implement and configure the network. Furthermore, in a production environment using a 5G network, devices are no longer relying on physical machines within the company to function. Instead, they’re virtual, using what we call the Mobile Edge Cloud. So for companies we’re not just making a 5G network available; we’re offering a turnkey IT service. These solutions will save companies money in materials, software and maintenance costs.

Why is 5G a better solution than WiFi, which is already available in most companies?

WiFi does not offer the same bandwidth stability. 5G is a superior service because it can guarantee a perfectly constant speed. In many critical industries, this is an essential requirement, such as a remote surgical operation, for example. The other key advantage of 5G compared to WiFi is that the latency time (ed. note: the delay from when information is sent and when it is received) is just a few milliseconds. That’s another key advantage, particularly when millions of data must be processed in real time.

What kinds of companies are interested in these technologies? Are you partnering with other Swiss groups?

We’re currently working on about 10 projects with large companies in industries such as pharma, logistics and retail. Due to confidentiality agreements, we can’t name any names yet. We should be able to provide more information this autumn. In the public sector, we’re exploring opportunities for 5G use with the police, the military and Swiss Federal Railways. We’re also involved with building a new cantonal hospital in Aarau, which will be equipped for 5G and is expected to open in 2023.